Easy money is here to stay. That was pretty much the message Chair Powell delivered this week. The US economy is up to the gills in leverage. A sustained rise in interest rates will hurt. The Fed will try to … Continued
Gold just broke out of a massive base, suggesting much higher prices in the future. At the same time, its current pace of gains has a parabolic touch to it. A pullback to successfully retest the breakout will greatly strengthen … Continued
June’s CPI was reported yesterday. Inflation behaves well. This makes the Fed’s job easier to continue to pour liquidity into the system. All hell breaks loose once inflation refuses to cooperate – whenever that is. After three successive months of … Continued
Stocks have diverged from sharp deterioration in fundamentals. At the lows, several indicators were at washout levels, resulting in the massive rally that followed. But at this point in time, they may be responding more to the Fed’s monetary backstop … Continued
There is already a debate going on as to if a new bull market has begun. What is more important at this stage is if last week’s low holds, as stocks likely come under pressure near term. Regardless if a … Continued
Following futures positions of non-commercials are as of March 24, 2020. 10-year note: Currently net short 212k, down 39.1k. Monday, the Fed went all in – essentially. It now has an open-ended QE program in place. There is no set … Continued
The announcement of QE4 last week failed to stabilize stocks. This is unlike how they behaved during QE1/2/3. Fear rules. Just a month ago, greed did. Sentiment will reverse. Last week, major U.S. equity indices were once again slammed. Even … Continued
Following futures positions of non-commercials are as of March 17, 2020. 10-year note: Currently net short 251.1k, up 36.5k. On Sunday, while cutting the fed funds rate by 100 basis points to zero-bound, the Fed also committed to purchase $500 … Continued
No one rang the bell when the longest bull in US stock market history came to an end last month. The drop was swift and decisive. Several oversold metrics are itching to get unwound. But markets are in panic mode. … Continued
Following futures positions of non-commercials are as of March 10, 2020. 10-year note: Currently net short 214.6k, up 57.9k. Next week, the FOMC meets. This follows a 50-basis-point emergency cut of last week, to a range of 100 to 125 … Continued